U.S. Stock Market

Stocks Lack Direction Ahead Of The Weekend

Some Emergency Lending Programs Will Not Be Renewed

U.S. Treasury Secretary Steven Mnuchin decided that some emergency Fed programs should not be renewed next year and that the money should be returned to the Treasury.

Mnuchin believes that companies need grants rather than loans in the current situation which expains why the emergency programs were not very popular.

At this point, the market agrees with Mnuchin, and S&P 500 futures are mixed in premarket trading. If traders believed that the existence of these programs was vital for the economy, they would have sold stocks and other riskier assets.

Meanwhile, the situation with coronavirus in the U.S. gets worse day by day, and states introduce new restictions. Yesterday, California and Ohio imposed nightly curfews to contain the spread of the virus.

The number of new cases recorded in the U.S. daily is already close to 200,000, and a move above this psychologically important level may put some pressure on stocks.

Stimulus Talks May Be Restarted

Yesterday, Democrats signaled that some Republicans were ready to get back to the negotiation table in order to discuss a new coronavirus aid package.

The previous attempt to reach a compromise deal yielded no results after many weeks of intense negotiations.

Markets remain skeptical about chances for a new stimulus bill before 2021. However, any signs of real progress in such talks may push stocks closer to all-time high levels. If negotiations gain steam, they will be a major story to follow in the upcoming weeks.

Gold Managed To Stay Above The Key Support At $1850

In recent trading sessions, gold and silver were under pressure as recent vaccine news reduced demand for safe haven assets.

However, this optimism has its limits. Gold failed to settle below the key support level at $1850 and is currently trying to rebound closer to its 20 EMA at $1885.

A move below $1850 will signal that investors have become even more optimistic about the speed of the economic rebound in 2021 which will be bullish for most stocks except for shares of precious metals miners.

For a look at all of today’s economic events, check out our economic calendar.